This invention relates to tools for evaluating contract bids, and more particularly, to systems and methods for evaluating bids for the sale of seasonal commodities.
Markets for perishable commodities have a number of distinctive characteristics. The commodity being sold generally cannot be stored for a long period of time due to cost considerations and the perishable nature of the commodity (e.g., meat). Because the product being sold cannot be stored for a long period of time, its market price is sensitive to seasonal pressures. Large price fluctuations between summer and winter are common. The inability to store product for an extended period of time also forces sellers to clear their product in a timely fashion to avoid significant financial loss. Market competition is often keen, which keeps profit margins low and places further pressure on sellers.
Because of these constraints, it is difficult to determine the fair market price for a commodity contract. Sellers therefore have difficulty in preparing contract bids. If a bid is based on insufficient information or a poor evaluation of market data, a seller may either receive a price for the commodity that is too low or may bid too high and lose a sale.
It is therefore an object of the present invention to provide a tool for evaluating commodity bids.